What would that program be, for example? I cannot make sense of a demand-side solution to a supply-side tax credit. How do you allocate the equity? It could well be that the house sold at what would be the market rate, and there's no way to get back the tax credits. - ThreadSky

annepaulson.bsky.social • 59 days ago

What would that program be, for example? I cannot make sense of a demand-side solution to a supply-side tax credit. How do you allocate the equity? It could well be that the house sold at what would be the market rate, and there's no way to get back the tax credits.

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rafamonsta.bsky.social•59 days ago

Dreams for All is equity sharing. Sorry, limited characters make this discussion difficult to explain succinctly.

annepaulson.bsky.social•59 days ago

Dreams for All is demand side. The buyer gets a loan. This program is supply-side; the builder gets tax credits to build something at a price that wouldn't otherwise be feasible. Which equity are you sharing here?

rafamonsta.bsky.social•59 days ago

Maybe it’s a combination: tax credits for the builder and the state shares in equity for the homes with a loan program to purchase the homes built with those tax credits. Maybe the equity sharing can help subsidize the tax credit program long term.

rafamonsta.bsky.social•59 days ago

It doesn’t make sense to subsidize demand or deed restrict them because the state would just be throwing money away, but if this program created new homes that were at least temporarily affordable for moderate income, and shared equity when they were sold at market rate, that seems fine to me.

annepaulson.bsky.social•59 days ago

Why would it be throwing money away to deed restrict them?

rafamonsta.bsky.social•57 days ago

If the state shared in equity for the property, then the deed restrictions would limit the potential return on that equity sharing. It just means the tax credit program would probably result in less overall production since it would be more expensive to run without those returns.

rafamonsta.bsky.social•59 days ago

The absurd program would be where, for some reason, the govt limited the first resale price (and its own potential return as an equity holder) but there was no deed restriction: the 2nd owner would benefit more than the first. It’s just a dumb thought I had that’s “consistent” with CalHFA programs

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